Denmark is making a monumental move towards its climate goals with a new DKK 28 billion fund! This initiative targets massive carbon capture and storage, aiming to significantly cut emissions. Could this bold step inspire other nations to accelerate their climate action, or is it merely a drop in the global bucket?
Denmark is embarking on a pivotal journey towards its ambitious climate objectives, establishing a substantial DKK 28.3 billion Carbon Capture and Storage (CCS) Fund. This strategic financial commitment underscores the nation’s resolve to significantly reduce greenhouse gas emissions and position itself as a leader in sustainable energy solutions, marking a critical step in its environmental agenda.
The newly unveiled fund is specifically designed to galvanize large-scale carbon capture and geological storage initiatives over a protracted period of 16 years. Commencing in 2029 and continuing through 2044, an annual allocation of DKK 1.77 billion will be disbursed to support projects focused on the capture, transportation, and permanent sequestration of various forms of carbon dioxide, including fossil, biogenic, and atmospheric CO₂.
These robust measures are projected to deliver a substantial reduction in Denmark’s carbon emissions, estimated at 2.3 million tonnes annually from 2030 onwards. This critical environmental impact will play an instrumental role in bridging the country’s identified 1.5 million tonne CO₂e gap, as detailed in the Ministry of Climate, Energy, and Utilities’ 2024 Climate Status and Outlook report, underscoring the fund’s direct contribution to meeting national climate targets.
Denmark’s proactive approach to carbon capture aligns seamlessly with broader European and international climate mandates. The European Commission advocates for the capture and storage of 50 million tonnes of CO₂ annually by 2040 to achieve a 90% reduction in emissions, while the IPCC emphasizes the need for 730 billion tonnes of global CO₂ storage by 2100 to adhere to the Paris Agreement objectives. These international frameworks highlight the global significance of Denmark’s efforts.
Beyond mere storage, the CCS Fund also champions Carbon Capture and Utilisation (CCU), supporting the long-term application of captured CO₂. Given the shared infrastructure between CCU and CCS technologies, the fund is strategically laying the groundwork for future CO₂-based industries. Furthermore, the contracts incorporate inherent flexibility, allowing participating companies to adapt and pursue superior commercial opportunities within the realm of CO₂ utilisation as they emerge.
This pioneering initiative has garnered robust political backing, culminating in a broad coalition within the Danish Parliament in September 2023 that consolidated previous separate efforts—the CCUS Fund and the GSR Fund—into a single, streamlined competitive bidding process. This strategic merger reflects direct feedback from industry stakeholders, who had emphasized the necessity for additional preparation time for comprehensive, full-scale implementation.
The public consultation phase for this significant fund is currently underway, with a deadline set for August 20, 2024. Following this period, the Danish Energy Agency is slated to release the definitive tender materials in October 2024. The final contracts are anticipated to be awarded by April 2026, subsequent to a rigorous prequalification and negotiation process. All essential documentation will be made accessible in English on both the Agency’s official website and the EU’s TED platform.
This marks Denmark’s third major funding round dedicated to Carbon Capture Storage, building upon earlier successes. The initial round saw a contract awarded to Ørsted, facilitating the capture and storage of 430,000 tonnes of CO₂ annually from 2026. More recently, the NECCS round, concluded in May 2024, is set to support three distinct companies in capturing 160,350 tonnes of biogenic CO₂ each year through 2032, further solidifying the nation’s commitment.
As Denmark continues to forge ahead, it is actively enhancing its national storage capabilities, with six exploration permits currently in operation, and has also established several crucial cross-border CO₂ transport agreements. These concerted efforts underscore Denmark’s unwavering dedication to innovation and collaboration in the global fight against climate change and for a sustainable energy transition.
